MIRA INFORM REPORT

Report Date :

08.03.2011

IDENTIFICATION DETAILS

Name :	ENZAL CHEMICALS (INDIA )LIMITED
Registered Office :	Mittal Industrial Estate, Building No.6, Gala No.159. Sir M.V Road, Andheri (East), Mumbai- 400059, Maharashtra
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	30.06.1992
Com. Reg. No.:	11-67485
CIN No.: [Company Identification No.]	U24110MH1992PLC067485
TAN No.: [Tax Deduction & Collection Account No.]	MUME01819G
PAN No.: [Permanent Account No.]	AAACE1222F
Legal Form :	A closely held public limited liability company
Line of Business :	Manufacturer of Specialty Drug Intermediates and Bulk Actives.

RATING & COMMENTS

MIRA’s Rating :

Ba (46)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 260000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Trade relations are reported as fair. Business is active. Payments are reported to be usually correct. The company can be considered good for normal business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – April 1, 2010

Country Name	Previous Rating (31.12.2009)	Current Rating (01.04.2010)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

INFORMATION PARTED BY

Name :	Mr. L. N. Khandelwal
Designation :	Business Development Manager
Contact No.:	91-22-66926473
Date :	03.03.2011

LOCATIONS

Registered Office :	Mittal Industrial Estate, Building No.6, Gala No.159. Sir M.V Road, Andheri (East), Mumbai- 400059, Maharashtra, India
Tel. No.:	91-22- 40418010/ 40418000/ 30
Fax No.:	91-22-66926472
E-Mail :	finance@enzal.com account@enzal.com
Website :	http://www.enzal.com
Location :	Owned
Area :	2500 sq.ft.
Factory 1 :	Plot 2803, Phase III, GIDC, Panoli 394116, Gujarat, India

DIRECTORS

As on 18.09.2010

Name :	Mr. Arun Guruprasad Gupta
Designation :	Managing Director
Address :	702 Vaishali Apartment, Janki Kutir, Juhu, Mumbai – 400 049, Maharashtra, India.
Date of Birth/Age :	01.10.1963
Date of Appointment :	30.06.1992
Name :	Mrs. Alpana Arun Gupta
Designation :	Director
Address :	702 Vaishali Apartment, Janki Kutir, Juhu, Mumbai – 400 049, Maharashtra, India.
Date of Birth/Age :	10.12.1969
Date of Appointment :	03.01.1994
Name :	Mr. Naveen Koolwal
Designation :	Director
Address :	Dani Wooltex Com 158 CST Road, Kalina, Mumbai, Maharashtra, India
Date of Birth/Age :	12.11.1972
Date of Appointment :	01.12.2006
Name :	Mrs. Gupta Khushi Ram
Designation :	Director
Address :	1301 Beachwood Towers, Yari Road, Andheri (West), Mumbai – 400 061, Maharashtra, India.
Date of Birth/Age :	08.07.1955
Date of Appointment :	15.03.2001

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 18.09.2010

Names of Shareholders	No. of Shares
Gupta Arun Guruprasad	449996
Gupta Alpana Arun	100000
Gupta Khushi Ram	1
Novamed Pharmaceutical Private Limited	400000
Santosh Leasing Private Limited	1
Anil Gupta	1
Naveen Koolwal	1
Total	950000

Equity Share Breakup (Percentage of Total Equity)

AS ON (30.09.2010)

Category	Percentage
Bodies Corporate	42.10
Directors or relatives of directors	57.90
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Specialty Drug Intermediates and Bulk Actives.

Products :

• N Methyl Piperazine
• N Ethyl Piperazine
• N Amino Methyl
• Piperazine

Product Description	ITC Code
1-Amino 4 Methyle Piperazine	29335909.10
N-Methyl Piperazine	29335909.90
Diethyl Carbamazine Citrate	2933.90

Exports :

Products :

Chemical

Countries :

• Europe
• U.S.
• Netherlands
• UAE
• Egypt
• Germany
• Pakistan
• Singapore
• Yemen
• UK
• Peru
• Kenya

Imports :

Products :

Raw Material

Countries :

• Germany
• Netherland
• China
• Shanghai

Terms :

Selling :

L/C, Cash, Credit (30 days, 60 days, 90 days)

Purchasing :

L/C, Cash, Credit (30 days, 60 days, 90 days)

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Chemicals	Metric Tonnes	500	246.84
Bulk Drugs	Metric Tonnes	205	279.19

GENERAL INFORMATION

No. of Employees :	100 (Approximately)
Customers :	End Users OEM’s
Bankers :	Syndicate Bank, Backbay Reclamation, 195, Motimahal, J. Tata Road, Churchgate, Mumbai - 400 020, INDIA Citibank N A Citigroup centre complex, Bandra Kurla complex, G- Block, Bandra (East), Mumbai- 400051, Maharashtra, India State Bank of India, Saki Naka Branch, Lakhraj Bhavan, Saki Vihar Road, Andheri (East), Mumbai-400072, Maharashtra, India ICICI Bank Limited, Mumbai

Banking Relations :	--
Auditors :
Name :	Rawani and Company Chartered Accountants
Address :	B 206 Hinal Heritage Behind Digmber Temple, S V P Road, Borivali (West), Mumbai- 400092, Maharashtra, India
Pan No.:	AABPR6534M

CAPITAL STRUCTURE

AS ON 30.09.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
1250000	Equity Shares	Rs.10/- Each	Rs.12.500 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
950000	Equity Shares	Rs.10/- Each	Rs.9.500 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

Expected Sales (2010-2011) : Rs. 300.000 Millions

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		9.500	9.500	9.500
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		57.932	52.085	47.440
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		67.432	61.585	56.940
LOAN FUNDS
1] Secured Loans		47.823	42.888	44.410
2] Unsecured Loans		1.866	10.028	12.545
TOTAL BORROWING		49.689	52.916	56.955
DEFERRED TAX LIABILITIES		2.265	2.072	3.472
TOTAL		119.386	116.573	117.367
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		39.455	42.941	49.803
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		1.099	0.697	0.287
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	50.266	56.695	60.040
	Sundry Debtors	42.081	32.303	34.462
	Cash & Bank Balances	9.418	9.549	8.912
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	30.759	23.376	18.029
Total Current Assets		132.524	121.923	121.443
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	43.748	38.369	45.403
	Other Current Liabilities		3.430	2.090
	Provisions	9.944	7.189	6.673
Total Current Liabilities		53.692	48.988	54.166
Net Current Assets		78.832	72.935	67.277
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		119.386	116.573	117.367

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	265.400	257.681	267.072
		Other Income	4.656	1.574	2.384
		TOTAL (A)	270.056	259.255	269.456
Less	EXPENSES
		Cost of Materials	190.267	172.648	190.666
		Employees Emoluments	12.767	11.990	16.000
		Manufacturing and Other Expenses	45.281	55.849	44.027
		Prior Period Items	0.000	0.021	0.000
		TOTAL (B)	248.315	240.508	250.693
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		21.741	18.747	18.763
Less	FINANCIAL EXPENSES/ INTEREST (D)		4.206	4.733	5.352
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		17.535	14.014	13.411
Less/ Add	DEPRECIATION/ AMORTISATION (F)		6.251	6.783	7.338
	PROFIT BEFORE TAX (E-F) (G)		11.284	7.231	6.073
Less	TAX (H)		4.881	2.030	1.747
	PROFIT AFTER TAX (G-H) (I)		6.403	5.201	4.326
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		40.585	36.440	33.156
Less	APPROPRIATIONS
		Transfer to General Reserve	0.650	0.500	0.500
		Proposed Dividend	0.475	0.475	0.475
		Tax on Dividend	0.081	0.081	0.067
	BALANCE CARRIED TO THE B/S		45.782	40.585	36.440
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	76.840	76.103	NA
		Insurance Freight	4.167	1.103	NA
	TOTAL EARNINGS		81.007	77.206	NA
	IMPORTS
		Import Value	75.636	69.605	NA
	TOTAL IMPORTS		75.636	69.605	NA
	Basic/ diluted Earnings Per Share (Rs.)		6.74	5.47

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	2.37	2.01	1.61
Net Profit Margin (PBT/Sales)	(%)	4.25	2.81	2.27
Return on Total Assets (PBT/Total Assets}	(%)	6.56	4.39	3.55
Return on Investment (ROI) (PBT/Networth)		0.17	0.12	0.11
Debt Equity Ratio (Total Liability/Networth)		1.53	1.65	0.95
Current Ratio (Current Asset/Current Liability)		2.47	2.49	2.24

LOCAL AGENCY FURTHER INFORMATION

OPERATIONS:

The gross turnover of the Company increased marginally from Rs. 295.282 Millions to Rs. 280.379 Millions showing a marginal increase of around 2% and the profits of the Company before depreciation and tax Increased from Rs. 14.012 Millions to Rs. 17.535 Millions showing a Increase around 25% in comparison to that of the earlier year, due to exchange rate difference earned during the year. During the year, the Company has provided for income tax of Rs. 4.400 Millions and also recalculated the provision for deferred income tax assets and accordingly provided Rs. 0.193 Million. During the year, the Company has transferred Rs.0.650 Million to the General Reserves, Rs. 0.556 Million towards dividend and corporate dividend tax. Balance profit of Rs. 45.783 Millions is carried to the Balance Sheet.

a) CONTINGENT LIABILITES :

i) Estimated amount of contracts to be executed on capital account and not provided for (net of advances) Rs. 0.552 Million (Rs. 0.946 Million).

ii) Disputed Demands in Income Tax Rs. 1.057 Millions ( Rs. Nil)

iii) Guarantees given to customs authorities is Rs 3.691 Millions (Rs.3.691 Millions)

iv) Letter of Credits outstanding Rs. 15.326 Millions (Rs. 15.732 Millions)

v) Disputed Demands in Sales Tax Rs. 4.956 Millions (Rs. 4.956 Millions). The Company has paid the said amount under protest and hence there will not be any additional liability.

vi) Disputed Demands with Excise Department Rs. 2.967 Millions (Rs, 2.967 Millions)

vii) There was a survey conducted by the CEC in the premises of the factory and accordingly they have taken certain records and documents which are lying with them. The exact nature of demand and the liability has not been informed to the Company but the management is of the opinion that the amount will not be material.

Bankers Charges Report as per Registry

Name of the company	ENZAL CHEMICALS (INDIA) LIMITED
Presented By	Mr. Arun Gupta
1) Date and description of instrument creating the change	Term Loan Agreement Dated 10.03.2005 executed by Enzal Chemical (India) Limited (hereinafter referred to as “the company”) in favour of Citibank N.A. (therein and hereinafter referred to as “the lender”)
2) Amount secured by the charge/amount owing on the securities of charge	Term Loan Facilities aggregating to Rs. 20.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	The whole of movable and immovable fixed assets, including movable and immovable plant and machinery, both present and future, located at Plot No. 2803/2804, GIDC Phase III, Village Sanjali, District Bharuch-394116 which are now due owing or payable or belonging to or pertaining to The Borrower or which may at any time hereafter during the continuance of this security become due owing payable or belonging to or pertaining to The borrower in the course of its business and TOGETHER WITH all benefits, advantages and legal incidence thereof.
4) Gist of the terms and conditions and extent and operation of the charge.	In consideration of the lender having agreed to lend/ advance to the company, credit facilities under the said loan agreement the company do hereby, inter alia/ declares as follows: 1) Covenant by the company to repay the facility at (2) and pay interest all other monies in the manner set out in the Loan Agreement between the company and the lender and toe comply with the term and conditions of the said Loan Agreement. 2) The said Assets hypothecated/ mortgage, to the Lender as and by way of First charge as security for and be charged with the repayment of the loan with all interest, liquidated, damages, premia on prepayment of on redemption, costs, chares, and other expenses payable by the company to the lender in respect thereof. 3) The companies to keep the said goods/ property in marketable and good condition and also insured as provided therein. 4) Power of entry, power to take charge and / or possession of, seize, recover, receive, appoint and sell, contract, dispatch for realization or otherwise dispose of or deal with all or any part of the said goods, etc. as provided therein.
5) Name and Address and description of the person entitled to the charge.	Citibank N A Citigroup centre complex, Bandra Kurla complex, G- Block, Bandra (East), Mumbai- 400051, Maharashtra, India
6) Date and brief description of instrument modifying the charge	Loan Agreement for Property mortgage dated Memorandum of Entry Dated 21.12.2005
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	All other Terms and conditions remaining unchanged the Term Loan facilities of Rs. 20.000 Millions if further secured by equitable mortgage on property including land and building situated at Plot No. 2803/2804, GIDC Phase III, Village Sanjali, District Bharuch-394116

Corporate identity number of the company	U24110MH1992PLC067485
Name of the company	ENZAL CHEMICALS (INDIA) LIMITED
Address of the registered office or of the principal place of business in India of the company	Mittal Industrial Estate, Building No.6, Gala No.159. Sir M.V Road, Andheri (East), Mumbai- 400059, Maharashtra, India
This form is for	Creation of Charge
Type of charge	Book Debts Movable Property
Particular of charge holder	State Bank of India, Saki Naka Branch, Lakhraj Bhavan, Saki Vihar Road, Andheri (East), Mumbai-400072, Maharashtra, India
Nature of instrument creating charge	Agreement of Loan-Cum- Hypothecation
Date of instrument Creating the charge	15.01.2010
Amount secured by the charge	Rs. 85.000 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest 2% above SBAR (SBAR = 11.75% w.e.f. 29.06.2009) with a minimum of 13.75% p.a. Terms of Repayment As per the sanction terms Margin Raw Materials: Imported 25% Raw Materials: Indigenous 25% Semi- Finished Goods 33% Finished Goods 25% Domestic Receivables 30% Export Packaging Credit 10% Letter of Credit 10% Bank Guarantee 10% Extent and Operation of the charge Demand cash credit Rs. 55.000 Millions EPC (within CC) Rs. (30.000 Millions) Letter of Credit Rs. 30.000 Millions BG- (Within Limit) Rs. (15.000 Millions)
Short particulars of the property charged	Hypothecation of Stocks and Raw Materials, Stock in process, Finished goods and Receivables. Hypothecation of Stocks of raw materials and bills negotiated by the banks. Hypothecation charge over the movables machinery and the company located at Plot No. 2803/2804, Phase III, GIDC Estate, Panoli-394116(Gujarat)

AS PER WEBSITE

HISTORY:

Enzal was founded in 1992 and now employs over 200 people in plant and head office. Shri. Arun Gupta - Chairman and Managing Director (Chemical Engineer from the premier institution IIT Delhi) leads the Enzal team. Enzal is a manufacturer of specialty drug intermediates and bulk actives for the pharma industry at the state of the art plant at Panoli, Gujarat, India.

The core business is the production of piperazine-based intermediates, steroid salts and custom synthesis for several years. And currently, they are the largest producers of piperazine based specialty molecules in India (30 mt/month).

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.45.13
UK Pound	1	Rs.73.35
Euro	1	Rs.63.06

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		46

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.